It’s no secret that city-dwellers spent much of 2020 looking for more living space. New data suggests that they’re finding better value in townhouses than in apartments, even as prices for those houses continue to rise.
In Manhattan, townhouse prices hit a 24-year high last year, with a median sale price of $5.3 million. But despite the rising cost, the price per square foot in those houses continued a decline that began in 2014, meaning buyers are getting bigger houses for their money — a reflection of the weak high-end market.
According to Jonathan Miller, of the appraisal company Miller Samuel, the average square-footage of townhouses sold in Manhattan is growing faster than that of comparably priced apartments. “They are getting bigger faster than luxury apartments, which peaked back in 2018,” he said. “The average square footage for a townhouse sale in 2020 was the second highest in 24 years of record keeping and the most since the 2008 great financial crisis, reaching 4,902 square feet.”
But while the shift to buying bigger has been part of the pandemic story — particularly suburban buyers seeking single-family homes for working, schooling and everything else — in Manhattan, it was a dearth of sales that helped drive up the median price.
“There was an initial narrative that with Covid there’s going to be this flight to townhouses, from multifamily, from condos, when actually the number of sales for townhouses was the lowest in 24 years,” Mr. Miller said.
In 2020, townhouse sales fell about 42 percent from 2019. Comparably priced apartments saw similar declines, a pandemic blow to an already struggling luxury sector. (We are defining this upper slice of the market to include townhouses that could be delivered vacant and apartments priced in the top 10 percent, roughly $3.6 million and above.)
The lack of listings no doubt affected luxury sales figures. Lots of homes were simply kept off the market, their owners unwilling to have strangers traipsing through during the pandemic. Wealthy townhouse owners also felt less pressure to sell their homes in order to purchase another. And potential townhouse buyers could opt for a single-family home in the Hamptons or elsewhere, leaving Manhattan sales to suffer. In all, listings for townhouses fell by about 62 percent from 2019.
It’s important to note that the glut of new-development condos languishing on the market and slow sales of townhouses predate the pandemic, so last year’s metrics should be considered just the most recent chapter in the ever-changing story of the Manhattan luxury properties.
This week’s chart shows how the average square footage of sold townhouses has outpaced comparable luxury apartments in Manhattan.